He said: “The Prison and Courts Bill will fall. It was part of a series of bills that were introduced to the House quite late in this current parliamentary session and received carry-on motions so that they could be debated in what would have been the third session of parliament.”

Although MPs return to the House of Commons next week, it is likely to be the final week before parliament dissolves for the general election campaign.

Therefore, Mr Lidington said, the bill would not be part of the “wash up” of legislation which force changes through before parliament is dissolved.

When the bill was announced in February it claimed car insurance premiums will be cut by around £40 a year, with new fixed tariffs capping whiplash compensation pay-outs and a ban on claims without medical evidence.

The proposed tariff system will look something like this …

For personal injuries lasting up to:

* three months = £225

six months = £450

nine months = £765

For longer-term personal injuries lasting up to:

* one year = £1,190

15 months = £1,820

18 months and two years = £2,660/ £3,725

The proposed new measures will allow judges to override the tariff in exceptional circumstances at their own discretion, but by no more than -20/ +20 per cent of the total sum.

One of the main aims of the reform was to clampdown on fraudulent claims for soft tissue injuries, most commonly, whiplash, while tackling wider insurance fraud, which the Lord Chancellor argues has fuelled an increase in insurance premiums in the UK, particularly motor insurance.

Now, it will be up to a new government to revive measures for personal injury and whiplash claims reform, subject to a decision by potentially a new Lord Chancellor.

“The decision will give the chance to have a re-think on the misguided reforms which would deny a great many people access to justice as well as clogging up the court system.

“We have major misgivings about the proposals for whiplash reform and raising the small claims limit and at least the newly-elected government will now have some time to re-visit the current proposals, which are a direct threat to injured people gaining access to justice.

“But unfortunately there is every possibility that an elected Conservative government would be looking to resurrect these reforms.”

Now, it will be up to a new government to revive measures for personal injury and whiplash claims reform, subject to a decision by potentially a new Lord Chancellor.